Zimmer on the $3.7M Bond

5/23/2008 Update:

After last night’s council meeting, 4th Ward Councilwoman Dawn Zimmer sent this letter out to her supporters and constituents:

dawn-zimmer-head-sm.jpg“Dear Friends,

Over the past several weeks, my fellow City Council colleagues and I learned that the Administration has been misleading the City Council and the people of Hoboken about the state of our City’s finances. We have spent millions of dollars more in this fiscal year than the Mayor disclosed in his budget. The City has been hiding its true spending by continually “sliding” payments into the next fiscal year. This practice is clearly irresponsible and very likely illegal.

The most egregious example is our health insurance. Last week, the City’s health insurance was almost canceled due to the fact that we had fallen at least 4 months behind in our bills. This was not a simple oversight. The City had under budgeted its health insurance by $3,600,000, and the Administration was trying to hide the information from its citizens. The City simply stopped paying its bills, planning to hide the true cost of this year’s operations in next year’s budget.

Had the City not received a termination notice from the insurer, we may never have discovered what was going on. We still don’t know what other expenses may have been hidden in this way. There are 40 days left in the fiscal year, and the Administration is still unable or unwilling to provide a straight answer as to how much it cost to run the City this year.

As of today, we know that our budget deficit is at least $7,900,000. Once full information is known, it is likely that the number will be even higher. The City has exceeded the amount that it is legally permitted to spend by millions of dollars. As a result, it is likely that there will be a substantial increase in our 4th quarter tax bills. The responsibility for this situation lies squarely with our Mayor, and those public officials who knew what was going on and helped cover it up.

Last night, the Administration asked the City Council to approve an application for a “spending cap” waiver. In essence, this waiver application would ask the State to retroactively approve over-expenditures that have already been spent, at a time when the Administration has still not been forthcoming as to the full extent of our problem.

By a 5-4 vote, the Council refused to permit this. The likely result is that the State Department of Community Affairs will step in and oversee our budget process. We finally will have the opportunity to have our “books” fully examined, so that the people of Hoboken can learn the truth about how our City is being managed. The five votes were cast by me, Councilman Cunningham, Councilman Russo, Council President Castellano and Councilwoman Mason.

While resolving our current situation will be painful, we are finally on our way to righting our fiscal ship. Once that it is done, and our financial situation is finally transparent, we will be able to plan responsibly for the future, and make the investments in parks and infrastructure that our City so sorely needs.

Next Wednesday, May 28, the City Council will hold an emergency meeting to address this crisis. If you can, I urge you all to attend.

I will keep you posted as to events as they unfold. Have a great Memorial Day weekend.

Dawn

See her original sentiments after the jump…

5/21/2008:

I’m glad to see some members of the city council understand that they can reach a much bigger audience by communicating with Hoboken411.

Here’s what 4th Ward Councilwoman Dawn Zimmer has to say:

Hoboken’s $3.7 Million Bond: Is it legal?

dawn-zimmer-head-sm.jpgConcerned about the legality of a $3.7 million bond to balance our City’s budget, 4th Ward Councilwoman Zimmer reached out directly to the NJ Department of Community Affairs to express her views on the issue. (See email communication below).

Councilwoman Zimmer recognizes that the issues facing our City and the 4th Ward are substantial, including the flooding, the traffic and the lack of sufficient open space. As our City tries to address these issues, it is 10 ½ months into the 2008 fiscal year and still without an adopted budget.

The Mayor has proposed that the City float a $3.7 Million bond to help pay this year’s operating expenses. At the last meeting, the City Council passed this bond ordinance on first reading, with 5th Ward Councilman Cunningham and Councilwoman Zimmer the only votes against the bond. (Councilwoman Mason abstained). Hoboken residents concerned about the City’s fiscal policies should attend tomorrow night’s City Council meeting. The email below to the DCA provides an overview of the bond issue.

Next City Council meeting: 7:00, Thursday, May 22nd

Monday, May 19th email communication to the Assistant Director of the NJ Division of Local Government Services, a division of the Department of Community Affairs:

email city council hoboken“Ms. Tripodi,

Thank you for speaking with me last week about my concerns with Hoboken’s budget. As you suggested, I am sending this email as a follow up to our conversation.

I understand that you are currently reviewing Hoboken’s proposal to issue a $3,700,000 property acquisition bond in connection with the refinancing of its existing “sale-leaseback” of its Municipal Garage.

I understand that loans structured as “sale leasebacks” including Hoboken’s existing Municipal Garage transaction, have been determined by the DCA to be true “sales” for the purpose of complying with the State’s Municipal Bond Law. The proposed transaction is materially different than those that have been approved in the past, and those differences raise serious questions with respect to the propriety of the proposed transaction.

The difference lies in the $3,700,000 property acquisition bond, which is being used to collateralize the sale-leaseback. Since it goes without saying that municipalities are not permitted to bond for the purpose of raising cash collateral for a loan, the bond is being characterized as for property acquisition. But what exactly is Hoboken acquiring? Approval of the sale-leaseback requires a determination that the transaction is really a “sale.” Approval of the bond requires a determination that the transaction is really an “acquisition.” Which is it? Through creative lawyering, perhaps you can do anything, even call something “white” and “black” at the same time. In the real substantive world, it clearly cannot be both.

When the “smoke” clears, and the true sale of Hoboken’s Municipal Garage has been consummated two years from now, Hoboken will be left owing the $3,700,000 bond, with absolutely no “acquired property” to show for it. We will have “acquired” nothing but debt, and that debt will have been used to pay this year’s current operating expenses. Surely this is precisely the situation that the State Legislature was trying to avoid when it chose not to include balancing the budget as a permissible use of the City’s bonding authority.

I am confident that your review of this matter will be thoughtful and complete. I look forward to your completion of that review.

Thank you and best regards.
Dawn Zimmer
4th Ward Councilwoman

Leave a Reply

25 Comments on "Zimmer on the $3.7M Bond"


astro
Member
astro
8 years 4 months ago

So did the city pay the gas bill yet?

luckyfish
Member
luckyfish
8 years 4 months ago

[quote comment=”84258″]OK Mr Donald Trump Wannabee

Riddle me this Mr Batman Sensei Real Estate Developer

If you’re so successful what are you doing living in a ground floor studio for 10 years that floods????

Honcho say answer that one smarty pants Unluckyfish

Ha!Ha!

Chop!Chop!
:mrgreen:[/quote]
What Studio???? Nevermind, I don’t need to prove anything to you… I have more important things to do today. Sorry I can’t entertain you anymore..
Chop! Chop! :mrgreen:

honcho
Member
honcho
8 years 4 months ago

OK Mr Donald Trump Wannabee

Riddle me this Mr Batman Sensei Real Estate Developer

If you’re so successful what are you doing living in a ground floor studio for 10 years that floods????

Honcho say answer that one smarty pants Unluckyfish

Ha!Ha!

Chop!Chop!
:mrgreen:

luckyfish
Member
luckyfish
8 years 4 months ago

[quote comment=”84180″]Good point Hobojoe!!!!

And another thing…if you live at the lowest point in town over an underground stream, well maybe you sholuld consider moving.

Either that or get yourself a second floor apartment!!!

Take some personal responsibility you Unluckyfish!!!!

Or else learn to scuba dive Ha!Ha!

Chop!Chop!
:mrgreen:

(Mayor Fatty Mcfatass love it!!!)[/quote]
FYI I do have second floor…. I was just recommending an idea to solve a problem that doesn’t just exist in the 4th Ward. I think I have taken a lot of responsibility! By owning and renovating many buildings in this town, I think I have made my share of contributions to utilities, water bills sewer bills and especially property taxes. I would just like to see some of this money re-invested that’s all……
Sorry your such a bitter poor bastard! Ha Ha.. 😆 😆

luckyfish
Member
luckyfish
8 years 4 months ago

[quote comment=”84117″]Not for anything, but if you’ve lived here for 12 YEARS and have seen the flooding problem that entire time, do you really expect them to magically be solved a few MONTHS after someone takes office?[/quote]
That’s why I recommended temporary pumps during storms Jackass!!! Just an idea…….

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